Canfax report

This cattle market information is selected from the weekly report from Canfax, a division of the Canadian Cattlemen’s Association. More market information, analysis and statistics are available by becoming a Canfax subscriber by calling 403-275-5110 or at www.canfax.ca.

Steer price rebounds

After three consecutive weeks of lower prices, western Canadian steer prices rebounded $2.50 per hundredweight to close last week at $144.79.

Bids strengthened from Wednesday to Thursday, with dressed sales ranging from $240-$245 delivered. Cattle that traded last week were scheduled for the first half of July delivery.

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Cash-to-futures basis levels weakened, but stronger prices week over week encouraged producers to market cattle. It was the first time this year that cash prices were at a discount against the nearby live cattle contract.

Over the past few weeks, there has been a large currency shift. The Canadian dollar is trading at the lowest point in one year, but the fed market tends to be slow to adjust for the currency. Big slaughter volumes should be considered bullish news for the cattle industry as the summer fed supplies are being aggressively worked.

Even though feeding margins remain negative, timely marketing will be critical over the next three months to keep feedlot inventories current and keep carcass weights under control. Carcass weights have bottomed and should trend larger into the summer.

Over the past three years, the average increase from spring low to fall high is 102 pounds. Based on a historical increase, this would put western Canadian carcass weights on track to peak at 908 lb.

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From January to May, placements of calves and light weight feeders under 700 lb. are down 20,500 head compared to last year. Year over year declines in lightweight placements should bode well for the fourth quarter market. Total beef and veal exports from January to April were up 4.5 percent compared to last year.

In American fed trade, dressed sales in Iowa and Nebraska ranged from US$172-$173, $4-$8 lower than the previous week, while live sales in the south ranged from $109-$110, steady to $3 per cwt. lower. Weekly beef production totalled 519.4 million lb., the largest production for that week since 2011.

Calves and light weight stocker prices were trading $3 per cwt. higher than last year while heavier feeders were trading $1-$5 lower. Feeder cattle imports from both Canada and Mexico were above last year.

Cows ease lower

Slaughter cows eased modestly lower last week on an ample offering with D2 prices 64 cents per cwt. lower than last week, trading from C$81-$95 to average $89.14. D3s were 83 cents lower, to average $78.50.

Dressed cow bids eased to around $170-$175 per cwt. Butcher bull prices slipped $2 lower to average $110.05. Western Canadian non-fed slaughter for the week ending June 16 eased to 6,203 head as packers ramped up fed production. Year to date western non-fed slaughter was 12 percent larger, totalling 191,736 head.

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Canadian non-fed exports to the U.S. for the week ending June 9 firmed to 3,192 head and year to date were 30 percent lower, totalling 60,264 head.

With drought intensifying in Australia and larger cow numbers in the U.S., global trim and grind supplies are building. Domestic non-fed demand remains well supported and despite U.S. boner cow prices strengthening, the Alberta slaughter cow market continues to trade at a premium.

Supplies should remain manageable through summer and prices are anticipated mostly steady through July.

Feeders steady

Feeder prices trended mostly steady last week with generally good demand observed for all types of feeders. A light offering of calves traded mixed on reduced quality and offering.

Mid-weight grass types also traded unevenly, with steers trending steady to higher and heifer prices steady to lower. Heifers from 800- 900 lb. rallied $3.50 higher than the previous week, but the tone for large feeders over 800 lb. was generally softer.

The majority of feeder sales are for immediate delivery, but a few steers over 1,000 lb. have traded in the low $180s for fall delivery. Interest from the U.S. continues to be noted on the western Canadian market.

Weekly auction volumes were 21 percent smaller than the previous week and generally steady with the same week last year. Year-to-date volumes are eight percent lower at 596,236 head.

Feeder exports to the U.S. for the week ending June 9 were seasonally smaller than the previous week totalling 4,111 head. Year-to-date feeder export volumes were 67 percent larger at 125,305 head.

Moisture concerns have influenced pasture stocking rates and may be limiting feeder and slaughter cow price upside. Sporadic precipitation across the Prairies has alleviated some market pressure and a full-blown weather market is increasingly unlikely.

Cut-out spread narrows

U.S. cut-out values eased seasonally lower last week on light- to-moderate boxed beef demand and offering. The Choice cutout slipped over US$4.50 per cwt. lower, to average $217.41, and Select trended mostly steady, averaging $201.61, to narrow the Choice/Select spread.

Canadian AAA cut-out values trended sideways at C$283.62 per cwt. and AAA slipped $3.28 lower to $262.43. Canadian slaughter for the week ending June 16 was six percent larger than the previous week, totalling 67,723 head and was the largest weekly slaughter since 2010.